Budget must address prevailing anomalies for tourism to grow: Madhavan Menon

Madhavan Menon – Chairman & Managing Director, Thomas Cook India Group writes on his expectations from the upcoming general Budget. He advocates for simpler taxation regime and rational policies to tap the domestic tourism segment for national growth and employment. 

We look forward to the budget with reference to what the government wants to do, but from Thomas Cook India’s prospective as an industry, if we focus at creating employment as a top priority then domestic tourism is a very important element in this entire exercise. We all appreciate that the domestic tourism in principle creates jobs, and there is a multiplier effect now in order to increase tourism domestically, I think there are whole lot of things needs to be done.  First of all, we need to rationalize the taxes in all hotels; we need to get rid of this disparity that exist in aviation turbine fuel which directly affects airfares across country; we need to get through all the exercises in order to ensure that the stimulus for domestic tourism is achieved.

We anticipate that the growth achieved in domestic tourism you will see job creation grow by multiplier effect as a result of that. So, from a budget point of view, I would like to see rationalization of aviation turbine fuel, taxes putting it under GST, potentially putting fuel under GST (car fuel under GST) and rationalizing taxes under GST of tour hotels.

The taxes that are being charged to tour operators is at 5%, however we are not able to source credits to set that off as a result of this – which increases the cost in the hands of consumer. Now if the taxes were raised and if we find inputs to tax credits to set them off, I am pretty sure that we can bring down cost of travel within the country.

As per government sources, India is planning to cut taxes on travel and tourism in next month’s federal budget and give more incentives to the USD 210 billion sector, hoping to boost economic growth and create more jobs. The move could add to a domestic tourism boom in the world’s second most populous nation, where low inflation and rising incomes are changing lifestyles and consumption patterns of an estimated 250 million middle-class Indians.

With scores of destinations introduced on airline routes last year, air travel is also surging. While technology continues to make its presence in all industrial sectors, travel and tourism sector requires urgent technological updates in terms of transport services. Technological support will help a great deal in boosting all sections of the travel and tourism industry.

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